Mastercard offers higher education savings benefit

MasterCard International in St. Louis is the first major private-sector employer in Missouri to offer its employees the opportunity to receive significant tax breaks for saving for higher education using payroll deduction, according to a Missouri Saving for Tuition news release.

For as little as $25 per pay period through payroll deduction, MasterCard's 1,300 employees can begin building a tax-advantaged nest egg to pay their children's higher education through the new Missouri Saving for Tuition or MOST program. Under the program, they will receive significant state and federal tax benefits on the funds they set aside as well as the earnings.

State Treasurer Bob Holden, who developed the program, and MasterCard President Jerry McElhatton met with a group of supervisors and employees recently to introduce them to the MOST program.

"If Missouri is to be a world-class location to live, work and raise families in the 21st century, we must increase the number of Missourians who go on to college or other post-secondary education," Holden said in the release. "Missouri can no longer afford to lag behind the national average in this important statistic. I believe our key to future success - to Missouri becoming an economic power in the next century is a well-educated and skilled workforce. That's why I am so excited about the MOST program that you are offering your employees."

The MOST program, which was developed by the State Treasurer's Office, is designed to take advantage of a federal law known as Section 529 that provides a federal tax deferment on earnings from eligible tuition savings programs. Missouri is sweetening the deal by adding significant tax advantages of its own, including state tax-free growth and an annual state income tax deduction of up to $8,000 per individual for contributions to MOST accounts.

"MasterCard believes that education is very important for the future, especially for our staff and their families," McElhatton said. "Adding MOST as an option in the MasterCard benefits program provides staff with flexibility, accessibility and tax benefits while saving for higher education for themselves, family or friends."

MasterCard's global technology and operations center in St. Louis processes as many as 25 million credit card transactions every day. The St. Louis office is MasterCard's largest office in the world.

Money saved through the MOST program can be used to pay for qualified educational expenses tuition, room and board, books and supplies at any eligible post-secondary educational institution anywhere in the country. Eligible institutions can include two- and four-year colleges and universities, and vocational, technical and proprietary schools.

Holden noted that his office recently sent letters to Missouri's 100 largest private-sector employers asking them to consider adding MOST as a new employee benefit. Several major public-sector employers, including the State of Missouri, St. Louis County and the University of Missouri system, offer MOST through payroll deduction. MOST also is available to all Missourians on an individual basis.

"MasterCard is the state's leader among private-sector employers in offering the benefits of the MOST program to its employees," Holden said. "I think MasterCard is doing its employees a tremendous service by offering this new, cost-free benefit."

The MOST program is overseen by a six-member state Higher Education Savings Program Board, which Holden chairs. TIAA-CREF Tuition Financing Inc., a wholly-owned subsidiary of TIAA manages funds placed in the program, which is part of the largest pension system in the world. The firm is the 19th largest Fortune 500 company.

Since the program's launch five months ago, Missourians have opened approximately 5,500 MOST accounts and contributed more than $16 million toward their children's post-secondary education, Holden said.

"Regular contributions to a MOST account are the best way families can ensure that money will be there to pay the costs for the advanced education they or their children will need in to be successful in the 21st century," Holden said.